Legislative Update

Tuesday, July 28, 2015
July 28, 2015 Legislative Update

Debate on State Budget Heats Up; Uncertainty Regarding Session Adjournment

As North Carolina House and Senate leaders continue to negotiate a compromised state budget plan, key tax provisions led to a heated debate between the Senate and Governor McCrory last week. Senator Brown (R-Jones) held a news conference with rural counties to tout his proposed budget provision to redistribute sales tax revenue. As previously reported, the Senate included within its budget proposal a provision that would change the formula by which sales tax revenues are distributed to counties across the state. Under the current state formula, 75 percent of the revenues from the local sales tax are distributed to the county wherein the taxes are collected, with the remaining 25 percent distributed on a per capita basis. Currently, local county commissioners have the option of distributing the local sales tax either per capita or based on property valuations. The Senate’s budget includes a provision that would distribute all local sales tax revenues per capita, phased in over four years. The proposal also changes the local sales tax to a state sales tax, requiring distributions among counties and municipalities to be allocated per capita.

Following Senator Brown’s news conference, Governor McCrory issued a statement saying he would veto any budget package if sales tax redistribution were to be included, calling the provision the “Tax Increase, Redistribution and Spending Act.” The sharp words between the Senate and the governor highlight the divide within budget negotiations.

As the divide within budget negotiations widens, the Senate has reportedly shut down their traditional committee work, concluding Thursday. Rumor has it that the House will follow suit in shutting down their traditional committee hearings this week. With committee hearings coming to a stall, House and Senate leaders are expected to focus on finalizing a budget deal in the coming month(s). The House took their budget negotiations public last week, holding a hearing within the House Appropriations Committee, receiving an update from the state’s Fiscal Research Division and allotting time for public comments. A follow-up hearing will occur Wednesday, July 29.

LEGISLATIVE ALERT

As the House and Senate conferees negotiate the differences in their respective budget proposals, it is critical to contact members of the conferee committees to urge them to expand the Job Development Investment Grant (JDIG) program and to not change the current sales tax distribution formula.

The JDIG program is critical to our state for continued job growth. The Senate included changes to the program in their budget which limits its use in urban counties. The House passed HB 117 early in the session which expands the program. North Carolina is not in the economic development game without the program.

The proposal to redistribute sales tax collection would not be good for Mecklenburg County or the state of North Carolina. Mecklenburg county and many other counties would receive less revenues under a redistribution impacting infrastructure investments, property tax rates and job creation. There are also potential impacts on bond ratings for communities because current revenues are already pledged for debt. Urge members of the conference committees not to include this in the final budget.

Members of the conference committees can be found at this link. Those from Mecklenburg County are included below. Click on their names to find contact information. 

Representative Bill Brawley, Co-Chair

Representative Rob Bryan

Representative Dan Bishop

Representative John Bradford

Representative Charles Jeter

Representative Jacqueline Schaffer

Representative Kelly Alexander

Representative Becky Carney

Representative Tricia Cotham

Representative Rodney Moore

Senator Jeff Tarte

N.C. House Pauses on Omnibus Regulatory Reform Proposal

The North Carolina House sent a large comprehensive regulatory reform package to the Conference Committee to work out the differences with the House and Senate. House Bill 765 – Regulatory Reform Act of 2015which began in the House as a one-page bill dealing solely with restrictions on the hauling of gravel, was revised by the Senate with nearly 60 pages of revisions. The current package now deals with a wide array of regulatory reform changes, primarily affecting environmental laws. The House Environment Committee held a two-hour hearing last week, which included numerous public comments stemming from attorney fees to elimination of funding for electronics recycling. The House appointed its conferees, which include:

  • Rep. Pat McElraft (R-Jones) – Chair
  • Rep. Dean Arp (R-Union)
  • Rep. Skip Stam (R-Wake)
  • Rep. Ken Goodman (R-Scotland)
  • Rep. Mike Hager (R-Wake)
  • Rep. Chuck McGrady (R-Henderson)
  • Rep. John Torbett (R-Gaston)
  • Rep. Larry Yarborough (R-Granville)

N.C. Senate Proposes New EPA Rules

The North Carolina Senate introduced legislation last week to pre-empt action against the Environmental Protection Agency (EPA) Clean Power Plan, which is anticipated to mandate states to develop plans to cut carbon emissions by 30 percent of 2005 levels or abide by a federal plan. The amended version of House Bill 571 – Judicial Review of EPA Clean Power Plan – prevents the state Department of Environment and Natural Resources (DENR) from implementing a state plan for EPA regulations until the federal rules are finalized. The Senate sponsor of the amended bill, Senator Wade (R-Guilford), stated after the committee hearing that she would work with DENR to tweak the bill language to permit DENR to implement the first set of less expansive rules under the federal plan, providing legal plans, if rejected by the EPA. The bill is currently scheduled to be on the Senate floor Wednesday, July 29.

N.C. Senate Moves Forward with Builders’ Inventory & Tax Exemption

Last week, the North Carolina Senate Finance Committee passed House Bill 168 – Exempt Builders’ Inventory which exempts property taxes incurring any increase in value from improvements to for-sale property by homebuilders. Under the proposal, homebuilders would apply for tax exemptions yearly, applicable to improvements on residential properties for up to three years and commercial property improvements, excluding buildings, for up to five years. Proponents argue that the state is behind competing states, such as South Carolina, which has similar residential property tax exemptions for up to six years. Opponents, primarily cities and counties, on the other hand, argue that the proposal could cost their budgets from $53 million to $66 million per year in property tax revenue. The bill now goes to the full Senate Appropriations Committee for consideration.

N.C. Senate Gives Final Approval to ‘Uber Bill’

The North Carolina Senate gave its final approval with vote of 41-5 to a comprehensive regulatory framework for transportation network companies (TNCs), such as Uber, Lyft and Sidecar, including North Carolina companies. Senate Bill 541 – Regulate Transportation Network Companies – requires TNCs to retain permits for $5,000 and pay a $5,000 annual renewal fee. In addition, the proposal requires local and national criminal background checks for all drivers and mandates levels of liability insurance for company drivers. The measure now moves to the House for consideration.

N.C. Senate Passes Measure to Move Charter School Oversight

Last week, the Senate passed an amended version of House Bill 334 – Transfer Office of Charter Schools – which will transfer oversight of charter schools from the Department of Public Instruction (DPI) to the Office of the State Board of Education (SBE). The measure transfers the Office of Charter Schools and nearly $1 million in associated revenue to the SBE, which is required to appoint an executive director of the Office of Charter Schools that will be overseen by a search committee chaired by the lieutenant governor within 90 days of becoming law. The bill also moves the Charter School Advisory Board from DPI to SBE.

N.C. Supreme Court Ruling on State Money and Private Schools

The North Carolina Supreme Court issued a 4-3 ruling last week finding that the state can use public funds toward students attending private and religious schools, deeming the use of tax dollars for education was a “public purpose.”  The decision comes as lawmakers propose $17.6 million in vouchers for the upcoming school year and expanding the program’s income-eligibility guidelines.

 

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Monday, July 20, 2015
July 20, 2015 Legislative Update

N.C. General Assembly Focuses on Budget Negotiations, Adjournment Uncertainty

Legislators returned to Raleigh last week after the summer recess, focusing their attention on budget negotiations. The North Carolina House announced their list of 82 budget conferees, with the Senate following later in the week with their 32-member conferee list. The House conferee list represented more than two-thirds of the members including Republicans and Democrats, but excluding all those members who voted against the House budget. The Senate, however, appointed only Republicans, but excluded Senator Rucho (R-Mecklenburg) who voted against the Senate budget.

As the House and Senate work on a budget compromise, they will aim to complete negotiations by August 14, the current deadline of the continuing resolution.  The pace and timing of the budget negotiations is very uncertain, with speculations spanning from August to December. The Senate announced last week that they would be wrapping up committee hearings this week, but the House did not make a similar announcement. Speaker Moore stated, however, that he expected the majority of noncontroversial pieces of legislation to wrap up by the end of this week. The competing budget versions differ by about $700 million with key differing provisions such as Medicaid reform and tax/economic development measures. Review the key budget differences the House and Senate will concentrate on as negotiations ensue.

N.C. State Budget Contingency Plan

Currently, North Carolina state government is operating under a continuing resolution; a resolution agreed upon and passed by both the state House and Senate chambers to keep the state government running on a temporary basis until a final agreement can be reached. The continuing resolution is set to expire August 14, 2015, at 11:59 p.m..  In the event that the House and Senate chambers do not pass an agreed upon budget bill before this deadline, there could be a lapse in state and federal budget authority and the need for a state continuity of operations plan (COOP).

Under the current continuing resolution, funding is maintained at 100 percent for current state government programs and services. However, according to a memo that circulated last week from the North Carolina Office of State Budget and Management (OSBM) to state department heads, under a COOP some government operations may not continue.  The minimum functions and services that must be performed for immediate response to issues of public lives or safety, or to avoid catastrophic loss of state property, must be identified by each department and incorporated into a statewide plan.

Although the memorandum states it fully expects the 2015-17 biennial budget will be enacted without a lapse in budget authority, OSBM has requested that all department heads submit their plans by July 27, 2015, as obligated by prudent fiscal governance.

Regulatory Reform Package and Public Hearing

On July 2, 2015, the North Carolina Senate gave approval to House Bill 765 – Regulatory Reform Act of 2015.  But, because the Senate adopted changes to the House bill, it was sent back to the House for a concurrence vote.  The bill is over 50 pages and includes several provisions that have passed either the House or the Senate, but may not have passed both chambers.

Last week, instead of bringing the bill straight to the floor for vote on concurrence, the House removed the bill from its calendar and placed it into the House Committee on Environment.  On July 21, 2015, the House Committee on Environment will hold a two-hour public hearing on the regulatory reform bill.  Several members of the public and group representatives have requested to make comment at the hearing. 

Continued Study of Employee Misclassification Reform

On Tuesday, July 14, 2015, a five-person subcommittee of the North Carolina House Judiciary II Committee heard public comment regarding House Bill 482 – Employee Misclassification Reform The primary issue of the meeting centered around the classification of employee versus independent contractor, while other issues included a provision on prohibiting employee retaliation, Industrial Commission stop work orders prohibiting companies from operating without proper workers’ compensation, and technical issues raised by staff and state agencies.

The subcommittee will meet again Tuesday, July 21, 2015, at 1 p.m., and is expected to release its report. The committee will ultimately take a vote on the proposal before the bill can proceed to the House floor. 

Zoning Changes/Citizen Input Proposal Sent to N.C. Governor’s Desk

Last week, the North Carolina House passed House Bill 201 – Zoning Changes/Citizen Input The bill eliminates the protest petition option for residents, which required a city council to vote by supermajority (three-fourths votes) rather than by a simple majority on rezoning proposals.  Instead, the bill requires the clerk of the board to deliver written statements regarding a proposed amendment from any resident or property owner in the city to the city council if submitted at least two business days before the proposed vote. 

The bill has now been sent to Governor McCrory for his consideration.

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, July 13, 2015
July 13, 2015 Legislative Update

Budget Negotiations Could Lead to Long Summer in Raleigh

The North Carolina General Assembly returns this week after the summer recess and will focus their attention on negotiating the state budget. Both the House and Senate have passed their competing spending plans, wherein large and pivotal differences remain between the chambers, resulting in a temporary spending plan being passed through August 14.  With the House voting 112-0 to not concur with the Senate’s budget proposal, the budget process is now in conference committee, where representatives from the House and Senate will meet behind closed doors to reach an agreement. The budget conferees are anticipated to be officially named this week.

As negotiations ensue, below is a summary of key budget differences that impact the Charlotte Chamber’s legislative agenda.

EDUCATION

 

 

House Budget

Senate Budget

K-12/Per-Pupil Spending

Increase to $5,446 from $5,047

Increase to $5,281 from $5.047

K-12/Class Sizes & Teacher Assistants (TA’s)

Retains class sizes and TAs

Reduces K-3 class sizes; cuts 8,600 TAs

K-12/Textbooks & Digital Resources

$91.8 million over two years

$58 million over two years

Private School Vouchers

$6.8 million (one time appropriation)

$6.8 million (recurring appropriation)

Community Colleges/Tuition

Increases tuition by $4 per credit hour

Increases tuition by $4 per credit hour

Community Colleges/Career Coaches

No Appropriation

$1.5 million for community college employed career coaches in high schools

UNC Management Flexibility Cuts-Operating Budget

Mandates $8.1 million in management flexibility reductions

Mandates $17.9 million in management flexibility reductions

UNC & “Game-Changing Research”

Provides $2 million to UNC for “game-changing” research

No Appropriation

University Energy Centers

No Appropriation

$317,094 for new energy center at UNC-Charlotte, funding for Appalachian State and NC State eliminated

UNC-Charlotte New Sciences Building

Authorizes the issuance of two-thirds bonds, authorizing debt of $90 million

No Appropriation

 

TRANSPORTATION

 

House Budget

Senate Budget

Infrastructure Bond/Borrowing

$269.5 million in two-thirds bonds

No Appropriation

DMV Fees

30% increase to pay for highway construction and bridge maintenance ($40 million)

20-25% increase to pay for highway construction and bridge maintenance ($29 million)

Strategic Transportation Investment (STI) Funds

$68 million increase in STI funds

$334 million increase in STI funds

Intermodal/Aviation

$2.5 million in grants-in-aid for public airport development

$4.5 million in grants-in-aid for public airport development

Motor Fuels Excise Tax Rate

Reduces the gas tax to 33 cents and increases to 36 cents on diesel fuel; rates to be adjusted annually beginning January 2017

Reduces the gas tax to 33 cents and increases to 36 cents on diesel fuel; rates to be adjusted annually beginning January 2017

Highway Trust Fund Transfer

No Transfer; Increases transfer of $3.7 million to General Fund

$216 million elimination in transfers from the Highway Trust Fund to the General Fund

 

ECONOMIC DEVELOPMENT/TAXES

 

House Budget

Senate Budget

Research & Development Tax Credit (R&D)

Elimination

Elimination

Renewable Energy Tax Credit

Extension to 2018; decreases the credit from 35 percent to 15 percent

No Extension

Film Grant

$50 million

$10 million

Personal Income Taxes (PIT)

 

Lower the PIT from 5.75 percent to 5.5 percent; expansion of the “standard deduction” per the portion of individual income

Corporate Income Taxes

No Appropriation

Reduces the corporate income tax rate from 5 percent to 4 percent in 2016 and 3 percent in 2017

Franchise Tax

No Appropriation

 

Reduces rate from $1.50 per $1,000 to $1.00; increase minimum tax to $200; increase maximum tax on holding companies to $150,000 in 2017

 

 

     

Single Sales Factor

No Appropriation

Implements  “single sales factor” taxing for businesses vs. the current tax structure of taxing companies based on sales, real estate holding and payroll

Sales Tax Redistribution

No Appropriation

Alters the distribution of sales tax throughout the state. Per current law, 75 percent of sales tax revenues collected goes to the county and city where the purchase is made, while 25 percent is distributed across the state based on population. Over the next four years, that formula would change so that, effective July 1, 2019, 20 percent would go to the county where a purchase is made, while 80 percent of sales taxes collected across North Carolina would be distributed based on population.

Sales Tax Expansion

No Appropriation

Eliminates the sales tax exemption for installation services; expands the sales tax to include veterinary services and advertising services

Sales Tax & Nonprofits

No Appropriation

Curbs the sales tax refunds for non-profits, resulting in a tax refund for non-profits from $45 million to $1 million by 2020

Job Development Incentive Grant Program (JDIG)

Extends JDIG through 2020; Creates job requirements for Tier 3 counties, from 20 to 50; No wage standards

Extends JDIG through 2018; Creates job creation requirements for all tier counties, Tier 1 counties 10 to 20, Tier 2 counties 20 to 50, Tier 3 20 to 100, Major Market Community 20 to 200; Creates wage standards for businesses to pay a percentage of average weekly wages for all insured private employees; Retains the current $15 million per year cap with an exception for high-yield projects, which is defined as $750 million in private funds and 2,000 hiring of eligible employees.

 

Mill Machinery Tax

Expands eligibility for 1%/$80 rate on mill machinery

 

Increase rate from 1%, $80 cap to 4.75%, $500 cap, October 1, 2015

 

Historic Preservation Tax Credit

No Appropriation

No Appropriation

Privilege Tax on Banks

No Appropriation

Repeal

Motorsports Tax Refund

Extends sunset until January 2020

No Appropriation

Data Center Infrastructure

Exempts electricity and equipment of a qualifying center from sales tax

No Appropriation

One NC/Local Match Modification

No Changes

Changes local match modification from flat 1:1 to a tiered 3:1 for Tier 1 counties, 2:1 for Tier 2 counties, 1:1 for Tier 3 counties, and 1:2 for major market communities

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, July 6, 2015
July 6, 2015 Legislative Update

N.C. General Assembly Passes 45-Day Continuing Resolution on Budget

North Carolina House and Senate members passed a continuing resolution (CR) last week that will fund state government on a temporary basis until August 14, staving off a June 30 budget deadline, which marked the end of the fiscal year. The CR was approved by the House 107-1 Monday night, with the Senate following suit Tuesday morning 43-0. Governor Pat McCrory signed the proposal Tuesday afternoon, though he did express his wish that legislators pursue a 30-day CR so that the state could have a budget in place as soon as possible.

The CR essentially keeps state funding at current levels, though it does include a raise in starting teacher salaries to $35,000 and excludes funding for drivers education programs, shifting the responsibility to local school boards. Both the House and Senate will be on a summer recess this week, reconvening Monday, July 13.  

N.C. Senate Passes New Omnibus Regulatory Reform Measure

The North Carolina Senate approved House Bill 765 – Regulatory Reform Act of 2015 – by a vote of 31-17. H765 would alter a wide array of North Carolina’s business, environmental and governmental regulations. The measure received approval in the Senate after a series of amendments were introduced, which Senator Tom Apodaca (R-Henderson) said would help placate the concerns of the state Department of Environment and Natural Resources (DENR), who had previously expressed opposition to the bill. The amendments, which passed unanimously, included the following: 

  • The removal of a section relating to stormwater runoff rules. 
  • A provision ensuring that operators of coal ash ponds would not be able to evade civil penalties by merely self-reporting environmental violations. 
  • The removal of a section exempting utility line projects from environmental regulations.
  • A one-year delay on coastal stormwater provisions.
  • The re-defining of the term “coastal wetland.” 

Review a summary of provisions within the regulatory reform measure.

Employee Misclassification Reform Sent to N.C House Subcommittee

The North CarolinaHouse Judiciary II Committee appointed a five-person subcommittee to study key provisions of House Bill 482 – Employee Misclassification Reform – after receiving mixed reviews from committee members. The bill, sponsored by Representative Dan Bishop (R-Mecklenburg), would allocate dollars to a special investigative unit dedicated to collecting data on businesses suspected of violating North Carolina’s tax and labor laws. The five-person subcommittee will be composed of Representatives Rick Glazier (D-Cumberland), Stephen Ross (R-Alamance), Robert Reives (D-Chatham), Chuck McGrady (R-Henderson) and Debra Conrad (R-Forsyth). Subcommittee members will focus on: 

  • Adding a provision for stop work orders to prohibit companies from operating without proper workers' compensation.
  • Altering a provision that permits owner-operators of transportation companies to be considered independent contractors, which can permit them to avoid litigating worker status in North Carolina 

The subcommittee will deliver their report in two weeks, at which time the House Judiciary II Committee is expected to take a vote on the proposal.

Building Code Regulatory Reform Heads to the N.C. Governor

The North Carolina House concurred Wednesday with Senate changes to House Bill 255 – Building Code Reg. Reform – by a final vote of 108-1. The measure had previously passed the Senate 40-0 and will now be sent to Governor McCrory for his signature or veto. Sponsored by Representative Mark Brody (R-Union), the bill reforms various laws relating to North Carolina building code inspections and creates a council to study the state’s building code licensing and approval requirements. Further, the newly created Building Code Council would be tasked with studying the feasibility of streamlining the application process so final permit decisions could be made within 30 days or less, and the threshold for requirement of a building permit would be raised from $5,000 to $15,000 to adjust for inflation.

Zoning Changes/Citizen Input Passes N.C. Senate

The North Carolina Senate approved House Bill 201 – Zoning Changes/Citizen Input. H201 would repeal the protest petition, a legal tool available to property owners in cities throughout North Carolina to contest rezoning. It would also remove a provision that requires zoning changes be subject to a three-fourths majority vote of a city council, instead requiring a simple majority. Further, the bill replaces the protest petition with a new process where property owners affected by the rezoning could submit written input to a city council regarding the change.

Supporters of the measure argue that protest petitions are archaic and represent a bygone period when property owners might not have had a way to be kept up-to-date about rezoning efforts. Opponents of the measure, however, say that the protest petition is a vital tool property owners need to protect against unwanted development. 

The bill will now go back to the House for concurrence.

Exempt Builders Inventory Clears N.C. Senate Commerce Committee

The North Carolina Senate Commerce Committee gave approval to House Bill 168 – Exempt Builders Inventory – which is meant to encourage new homebuilding by giving each residential builder in North Carolina a three-year property tax exemption for any increase in the value of residential property that the builder is attempting to sell.

Some local governments have expressed opposition to the bill, saying it would severely limit revenue sources for counties and cities. An analysis from the legislature's Fiscal Research Division (FRD) estimates that H168 could cost counties and cities throughout North Carolina $53 to $66 million each year. The bill will now go to the Senate Finance Committee for further consideration.

N.C. Senate Transportation Committee Passes Ride Sharing Regulations

New regulations for Uber and other smartphone-based transportation services passed the Senate Transportation Committee, after a bipartisan proposal was brought forward by Senators Floyd McKissick (D-Durham) and Bill Rabon (R-Brunswick). If enacted, Senate Bill 541 – Regulate Transportation Network Companies – would regulate transportation companies such as Uber, Lyft and Sidecar by requiring a state permit to operate the transport vehicle, background checks for drivers, and the maintenance of up to $1.5 million in liability insurance for transport vehicles.

S541 sets the application cost of operating permits at $5,000, in addition to a $5,000 renewal fee. The proposal’s insurance requirement would mean that commercial insurance would take the place of the driver’s personal insurance whenever he or she was en route to pick up or drop off a customer. The bill will now go to the Senate Finance Committee for further consideration.

Autism Health Insurance Coverage Passes N.C. House Insurance Committee

North Carolina Senate Bill 676 – Autism Health Insurance Coverage – cleared the House Insurance Committee with strong support. The bill, sponsored by Senator Apodaca, requires that health benefit plans provide coverage for the screening, treatment and diagnosis of autism spectrum disorders. House Bill 646 – Insurance Coverage for Autism Treatment – also addresses insurance coverage for autism spectrum disorders, but it has not been acted on since being sent to the House Insurance Committee in April. Advocates for autism coverage say that although the two bills differ markedly in the level of coverage they would provide, the central point is to establish coverage as soon as possible and then work with legislators to perfect the proposal in the future. Critics of the Senate plan have also charged that it removes autism from the mental conditions protected by state parity law, while the House version preserves the parity.

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Monday, June 29, 2015
June 29, 2015 Legislative Update

House & Senate Begin Battle on Budget Negotiations

Last week the House voted not to concur with the Senate’s budget proposal in a unanimous vote of 112-0, setting off budget negotiations between the two chambers that could last well into the summer. In rejecting the Senate’s $22.4 billion spending plan, House members were critical of major policy changes, such as Medicaid, taxes and economic incentives, among other things. The House Finance committee met last week to begin the public debate on the Senate budget’s finance provisions, reviewing major changes the proposal would make in tax formula affecting hospitals, non-profits, cities, counties and others. The committee focused its debate on provisions which decreases the current $45 million cap on sales tax refunds for non-profits down to just $1 million over five years, in addition to redistributing sales tax revenue among North Carolina’s counties.

The state’s fiscal year ends next week on June 30 and House Speaker Tim Moore (R-Cleveland), along with Senate President Pro Tempore Phil Berger (R-Rockingham), has already said he feels it is “unrealistic” for members to have a budget in place before then. House Finance chairman Jason Saine (R-Lincoln) said that the Senate wants “serious changes” which require careful study and that he felt members had “a long way to go before we get any sort of agreement.”

In the absence of a budget deal, a continuing resolution (CR) would need to be passed to fund state government on a temporary basis until final agreement on a spending plan could be reached. A budget conference committee, made up of appointees from both chambers and charged with ironing out differences between the two bodies, is expected to be appointed this week, though legislators are scheduled to take a break for the July 4 holiday.  

House Passes Medicaid Modernization

House Bill 372, 2015 Medicaid Modernization, passed the House last week with a final vote of 105-6 after previously clearing both the House Health and Appropriations committees. Sponsored by Representatives Nelson Dollar (R-Wake) and Donny Lambeth (R-Forsyth), H372 would permit provider-led entities (PLEs) to bid for contracts and allow them to manage networks of at least 30,000 of NC’s Medicaid recipients. Similar to the Senate proposal, the plan would do away with the state’s present fee-for-service system in exchange for full-risk capitated plans. Within five years of becoming law, 90 percent of Medicaid recipients under H372 would be required to enroll in full-risk, capitated health plans for all physical health services (the final 10 percent, those with the highest-cost needs, would continue to be covered under the current fee-for-service system). A year later, each PLE would have to meet the risk, cost, performance, and quality goals that are in their contract with the state.

The measure will now be sent to the Senate where it will face long odds due to significant differences between the House and Senate Medicaid proposals.

Senate Passes Building Code Regulatory Reform

House Bill 255, Building Code Reg. Reform, passed the Senate last week with a final vote of
40-0. Sponsored by Rep. Mark Brody (R-Union), the bill reforms various laws relating to NC building code inspections and creates a council to study the state’s building code licensing and approval requirements. Under the terms of the proposal, building inspections would have to be completed in a “timely manner” and include a full report of all items which fail to meet code so that permit holders can make needed fixes. Further, the newly created Building Code Council would be charged with studying the feasibility of streamlining the application process so final permit decisions could be made within 30 days or less. The bill would also raise the threshold for requirement of a building permit from $5,000 to $15,000 to adjust for inflation.

H255 has drawn varied reactions from the state’s construction and building inspection industry, with some expressing concern that the language regarding “timely manner” of inspections is too vague and could result in inspectors falling out of compliance during periods of high demand. Proponents of the measure, however, argue that inspection time frames vary widely in different jurisdictions, something that is a source of great frustration to builders.

The original proposal featured a residential code subcommittee that would serve as part of the larger Building Code Council and whose membership would include an engineer, plumber, heating contractor, fire service representative and electrical contractor. A number of building inspectors spoke out against the creation of the subcommittee on the grounds that it would not feature a representative from the building inspection community. After receiving a favorable report on Wednesday in the Senate Agriculture, Environment and Natural Resources committee, the bill was sent to the Senate floor where Sen. Tommy Tucker (R-Union) offered an amendment to add building inspectors to the residential code subcommittee. The amendment passed, 48-0. H255 will now go back to the House for concurrence with the changes the Senate has made.

 

 

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